Abstract
A case is presented about insider information for a company attempting to prevent financial devastation to the extent of bankruptcy. The company has a good reputation with one firm whose credit officer learned of the financial risk. She has been asked to refrain from divulging this information to another potential creditor. The ethical dilemma for the credit officer is to report only the credit history as a reference based on transactions with the company or to share the projected actual risk. The following analysis will explore ethical issues from the rights perspective of the employee, the company, and stakeholders. Various alternatives will be evaluated. Consideration will be given for practical constraints for the employee and company. A recommendation will be made with steps the employee and company can take.
Keywords: insider trading, rights perspective, ethics, credit management
Good Credit Reference
Introduction with Relevant Facts A case analysis and recommendation has been prepared based on the case information provided (UoPeople, 2018): Kathy Ryan is a credit officer for Diversified Consolidated Corporation
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Kathy could lose her job if North files bankruptcy prior to paying DCC. Scott may lose his job at North if it files bankruptcy. North’s employees, vendors, and customers are stakeholders and will be at a loss if North files bankruptcy. Mike and Basic are stakeholders as Basic could be out a lot of money if they extend credit to North. Mike could lose his job if Basic issues credit to North. Employees, vendors, customers, and stockholders of each of the companies are stakeholders affected by financial loss of the company to which they are associated. Without consideration for the stakeholders, the decision Kathy makes will have impact greater than her own personal job security (McKinney, Emerson, & Neubert,
In the end, the decisive decision will be based on a dollar amount. With the company’s legal and economic environment, there are certain benefits given; limited regulation, individual property rights, and healthy competition.
Major Stakeholders The 1. Customers 2. Shareholders – 8,800+ Alaskan Native Americans 3.
BUL 2241- Module14 - Edward Olford 1. Because there was more than one owner, a sole proprietorship was not appropriate. A general partnership would lead to individual member liability: Since the deli failed, this would have subjected the partners to significant personal liability. A limited liability company, closely held corporation, or S corporation would both protect owners from personal financial liability. As the deli failed, this would be a benefit.
The corportation has a duty to be accountable for their actions and how they affect their customers. Under the stakeholders approach they should have evalutated their decisions not to fix the axle problem and the effects it woud have it left unfixed. Since they knew the axle was a problem the negliget their customers. Furthermore, under the corportate citizen approach the corportation should have used their wealth and power to benefit society, not harm it. The least they could do after causing damages would be to compensate for
Viewpoints of Stakeholders…………………………………………………………..4
Company Q is having few grocery stores in a metropolitan city. Out of all the stores, two stores were not making any profits, so Company Q has recently closed those two stores. As per economical responsibility, business should make some profit and provide a return on investment to their investors. If business is running in loss then it is better to close that business. Company Q has taken correct decision closing those two unprofitable
Tabitha Andes faces ethical considerations as a new hire as the assistant treasurer. She is being told to purposefully turn in the Southside Stores checks four days late, in order to make a little extra money on the interest they would earn in those four days. Ethically, this is wrong because you are taking advantage of the creditors that “need our business and don’t complain.” However, some creditors complain, but this company will simply “blame it on the mailroom or the post office.” Doing both of these things is ethically wrong because you are taking advantage of others for your company’s own personal gain.
Conclusion The insider trading scandal with Martha Stewart represents an important example of the risk associated with branding a company with an individual. As soon as the company brands themselves under an individual’s name, the corporation has the risk of rising or falling in profits based on the reputation and the ethical implications of the individual. Businesses should exercise care with branding a company on an individual and avoid it as much as
A Stakeholder is any individual who has a vested interest in a business and is affected by the organisations decisions and strategies (Pride, Hughes & Kapoor 2015, p. 10). Therefore, the people most affected by Graeter’s decisions to take a long term view of the business rather than aim for short term profits are the family members who have a stake in the business. At the present, Richard Graeter II (CEO), Robert Graeter (vice president of operations) and Chip Graeter (vice president of retail operations) manage the business and are responsible for all the decisions regarding its operations. Graeter’s management team have chosen to forgo the opportunity for short term profits by adhering to the traditional manufacturing process used by Louis
J. Buffalo who owns J.Buffalo Corp. has convinced current and former employees to transfer their jobs and retirement benefit plans to a new subsidiary called Great Plain Combines which he expected to fail. J. Buffalo has violated the ethical standards “Hiding information.” When J. Buffalo was convincing employees to accept the transfer of their jobs and retirement, he did not fully disclose that he expected it to fail, therefore he was hiding information that has harmful results. In our case the employees would not have considered transferring to Great Plains knowing that the corporation will be short lived.
At Lockheed Martin, shareholders represent a significant portion of this demographic. They are anyone who owns Lockheed’s stock and is impacted by its performance; positively when the stock rises and negatively in times of poor performance. Lockheed is concerned about its shareholders because they are entitled to earning profits from its stock as investors and owners of the company. If shareholders become dissatisfied they can change how the company is run; for example, they can replace the existing board of directors through a voting process. Consequently, Lockheed Martin’s decisions are focused on generating profit for their shareholders to increase stock valuation.
Recently Wells Fargo’s scandal of creating phony accounts has raised ethical concerns in the corporate world. Wells Fargo employees opened more than two million unauthorized bank and credit card accounts to meet sales projections. The company was charged with huge fines and earned a bad reputation that will take years to rebuild. According to the Deontological perspective on ethics least some acts are morally obligatory.
Executive Summary Lehman Brothers were an investment bank involved in transactions worth billions of dollars and one of the most powerful investment banks in the world. Lehman Brothers collapsed in 2008 following bad investment in the sub-prime mortgage market and used bad accounting practices called Repo 105 transactions to try and cover up the bad assets. This report sets out the use of the fraud triangle when describing the actions which led to the collapse. The pressure applied on the bank, the opportunity due to the lack of regulation to carry out the actions and the ability of the bank to rationalise their decision making.
In the situation between Boeing and McDonnell Douglas, the stakeholders would be the employees and investors of both companies. These individuals would be the stakeholders because they are the individuals who have an interest in the success and failure of the company. In the end of the situation, it states that after the $2.6 billion write-off due to cost overruns was announced, Boeing’s stock price had fallen 20%. This being because less people wanted to buy stock from this company due to the unethical practices and high cost overruns. Even though some investors left the company, McDonnell Douglas couldn’t because of their deal with Boeing.
Review of Literature Unethical behavior can tarnish a company’s image and reputation. If a company is unethical, they may have to spend additional money to improve their public image, as well as gain back as many customers as possible. The reason I have chosen to use articles that are quite a few years old and that are not so recent is because I feel that they are very good examples of what I am trying to prove in the terms of ethical behaviour within companies and these specific articles relate well to my chosen topic.